Mohammed bin Salman is a forward-looking, progressive guy with big plans for his country. Just ask him, he’ll tell you.

Sure, some people get hung up on dead dissidents. And not everyone is enamored with the spectacle of sulthan executions in the 21st century. And, yes, others worry MBS’s commitment to de-coupling from the Wahhabi establishment is overstated. Oh, and yeah, he’s partly responsible for the perpetuation of Earth’s single-worst humanitarian crisis in Yemen.

Other than all of that, though, he’s a good guy, a modernist and a reformer. He wants to build futuristic cities, for example, and turn the Kingdom into an honest-to-God tourist destination. But that sort of thing costs money. Fortunately, the Saudis have plenty of money.

Money doesn’t exactly grow on trees in the Kingdom, but it does bubble up from the ground. There’s just one catch: The price of oil fluctuates, sometimes unpredictably. So, the Saudis have to manage it, in this case higher, lest MBS should have to borrow to fund his Jetsons city (and the social expenditures that keep the populace pacified.)

Oil was already at YTD highs, but that wasn’t good enough for the Saudis, who’ve taken multiple steps this year to support prices which arguably don’t need it. On Tuesday, the Kingdom prolonged for three months a voluntary production cut of one million barrels per day.

“In effect, the Kingdom’s production for the coming months of October, November and December will be approximately nine million barrels per day,” SPA said, describing the decision as a step towards “reinforcing precautionary efforts made by OPEC+ countries with the aim of supporting the stability and balance of oil markets.” Simultaneously, Alexander Novak said Russia will extend its own voluntary reduction (300,000 barrels per day) until the end of the year.

Although expected, this is the sort of thing with the potential to exacerbate the already fraught relationship between the Biden White House and MBS’s Jed Clampett monarchical theocracy. The current administration in Washington, unlike its predecessor, isn’t especially cozy with the Crown Prince, who abides the war in Ukraine and in some respects views Vladimir Putin as a kind of kindred spirit.

Much has been made in 2023 of the Kingdom’s flowering bilateral ties with Beijing, which brokered an ostensible truce+ between Riyadh and Tehran in March. Xi’s Middle Eastern trip in December was hailed by sundry propaganda outlets as “proof” that the Saudis are keen to establish the mythical petroyuan. (Never mind that the riyal is hard-pegged to the dollar and the yuan soft-pegged to it.)

The Saudis are taking a page out of corporate America’s pandemic playbook: MBS is pursuing a price-over-volume strategy with oil. That’s a gamble. As I put it in July, it’s great if it works, but if it doesn’t you “look like an idiot” because you’ve wittingly undercut your fiscal position with nothing to show for it.

In the Fund’s latest update, the IMF downgraded Saudi Arabia’s growth outlook. The Kingdom’s economy is seen expanding just 1.9% this year, down from a projected 3.1% in April. Oil exports recently fell to the lowest in two years.

Fuel demand around the world has rebounded to near record levels, and although both the Chinese and European economies are in trouble, there’s scarce evidence to suggest the Saudis’ production cuts are based on any kind of fundamentals. Needless to say, higher oil prices could complicate Western central banks’ inflation-fighting efforts.

Goldman said Monday that the global oil market is staring down a “large deficit” of around of 2.3 million barrels per day in Q3 thanks to OPEC+’s production cuts, including the Saudis’ voluntary reduction. If past is precedent, the cartel (and Russia) won’t be in a hurry to boost production, the bank’s Daan Struyven and Callum Bruce said.